Fast Foods has a restaurant that is open all day. Fixed costs total $450,000 per year. The service varies from a cup of coffee to complete meals. The average sale per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The Income Tax rate is 30%. The target net income is $105,000.

(a) Calculate the income needed to obtain the target net income. 

(b) (i) How many customers are needed to break even? 

(ii) How many customers does it take to get a net income of $105,000? (3 points)

Answer rating: 100% (QA)

a To calculate the income needed to obtain the target net income we need to consider the fixed costs ... View the full answer